IDB’s Spacecom acquisition nears closure

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Israeli satellite operator Spacecom, which owns the AMOS fleet of satellites and has been up for sale for well over a year, is in the process of being acquired by IDB Development, a local investment company.

At first glance the deal is being made at a ‘bargain’ price. Israeli reports say that IDB made an initial offer of only $45.75 million for a 54.7 per cent stake, plus a cash infusion of $11.45 million.

Reports out of Tel Aviv say that IDB has since tripled its cash infusion offer to $34 million.

Spacecom itself is a subsidiary of Eurocom Group, which is the majority shareholder in Israeli telecoms giant Bezeq. However, Bezeq is itself operating under a considerable cloud with its CEO Shaul Elovitch alleged to be involved in criminal activity including corruption. Elovitch, as well as his son and daughter, stepped down from the Bezeq board of directors at the end of February.

IDB is Israel’s oldest (established in 1981) and largest investment holding company. It also manages Discount Investment Corp (75 per cent) run by Eduardo Elsztain, which had previously offered to buy the whole of Eurocom. Discount Investment controls Bezeq’s rival Cellcom Israel Ltd.

Eurocom itself is reportedly in debt to lending banks and institutions said to amount to some $420 million.

In March Spacecom ordered up a new satellite (to be called Amos-8) from Space Systems/Loral. Currently the company is paying some $22 million a year to lease AsiaSat-8 from its Hong Kong owners as a ‘gap filler’ until the new Amos satellite is delivered. Amos-6 should be ready for launch in 2020.


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